FHA Loan Requirements

FHA loans have allowed Americans to borrow money from the lenders for the purchase of a home. FHA does not make loans. Rather, it insures loans made by private lenders. These loans can also be obtained despite a poor credit history. The requirements for these loans are not strict and they can be got quite easily from the lenders. The interest rate is also lower than other type of loans.

Requirements for the FHA loans

1. Any past bankruptcy must be at least 2 years old,

2. You should have had a very good credit for at least 2 consecutive years following the past bankruptcy.

3. You should be able to show steady income for at least three years. The lenders will then be more confident about your repaying abilities,

4. Foreclosures should be at least three years old. This is a major requirement in getting a FHA loan,

5. You should be able to make a 3% down payment,

6. You need to have a valid social security number so as to prove that you are an American citizen.

But the FHA loans also have a disadvantage which can make them a poor option for certain people. This is because the lenders have loan limits depending on the county. Thus, the borrowers might not be able to get the amount of loan they really require to get the house. Moreover, Private Mortgage Insurance is required regardless of the amount of the down payment. This is another disadvantage of the FHA loans. There are lots of lenders giving the FHA loans. You need to do extensive search and compare offers by various lenders to find the best lender.

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